I was reading another post on this forum about how "Custom" will allow you to create an out-of-spec video file. This is exactly why I was thinking of allowing the customization of the video specs in-app: to prevent out-of-spec video from being created (and thus eliminating a big time waster.) When inputting a custom bitrate, for example, a message could be displayed showing that an iPod needs such-and-such a lower bitrate.
Hope this makes sense to the developers. I'm not sure I am aware of what's going on. (No caffeine in me at the moment)